SPX Credit Spread Trader

I also see the 1190 support level that was tested in late June, with the sentiment the last few days I'm not sure how well that will hold. The warning level for my puts is 1185 (I am short the Oct 1170). My concern is that we blow through 1190 going down and I will be forced into an adjustment. Up until the last few days I had worried that after the hoopla about hurricane Rita calmed down the market would start a relatively strong upward move to threaten my calls. Phil's butterfly position may turn out to be a very good play afterall.

ryan


Quote from optioncoach:

I see one potential technical projection to the 1190 level and tht is my next support level for now. We will see what happens in the next day or so and I will have to evaluate both my put spreads (on the XEO and on the SPX).

Lot of negative sentiment and a huge professional short day. Could have the smart money come back in for bargains or continued panic lol. The antennae are now tuned heavily and will be watching closely.

Phil
More...
 
Yes, that fill was right around 10am when the market was heading up, and then I tried to get into the puts when the market tanked. I'm glad waited until today's tank...now let's just hope we don't have too many down days in a row.

I'll have to take a look at the bid/ask tommorow on the call side, I generally just let my positions expire to save the commisions and $$ to close them out. Every little penny counts since I'm only doing 15-20 contracts on a side.

sd

Quote from rdemyan:

sd:

Nice fill on the 1290/1280. Just out of curiousity did you get that filled before the market starting going down yesterday (Tues. 10/4/05)?

It looks like you might be able to take a hefty percentage profit already by closing it out.
More...
 
"Are you considering any adjustments to Oct. 1175/1165 put spreads. I beleive that we are close to the 15 point "danger zone"."

-- Phil, I guess the three choices are roll it down to another OCT spread, roll it down and out to a NOV spread, or close it, or wait?
 
october ....what would be wrong (as opposed to other strategies) to roll it to a nov , and possibly getting another .25 or more? i know it ties up margin, but it is not costing me any insurance money by buying long spy or ot in current month.
 
I am not a big fan of rolling out to another month as opposed to rolling down or closing the position. What happens is that you just took your best friend, time decay, and made it an enemy in that you have given the position even more time to move against you.

Now I cannot say it is wrong to do, just I am not sure I am comfortable with doing it since you now extend the margin tie up for another month trying to salavage your position which can still move against you. You may be able to roll out to NOV for a net credit as opposed to rolling down for sometimes a tiny net debit but that is why I try and choose strikes so far away- so that my adjustments are rare and that rolling down does not really affect my profitability significantly. As was seen in SEPT rolling down did affect my profitability but I felt it is better to take it then rather than defer it another month where losses could be greater.

This is only my opinion and others may prefer to roll out and stick with it until they can close for a profit since they can simply stay ahead of the index as best as they can. I think I like turning the money over and if it means absorbing a small loss 1, 2x a year to move on to many more profits, it is what suits me.

Just remember that rolling to NOV has pros and cons and the con of more time and perhaps greater negative effects from adverse market moves with so much time left leans me towards not doing it.

Phil
 
Coach,

I got 1140x1150 filled for $1.2 :-) just a minute ago.

Quote from skdoyle1:

I gave up on the 1130x1140 and just got filled for 1.00 on the 1140x1150. It's a tie this time Phil! The volume was about 4200 on this spread vs 550 on the 1130x1140. Figured I had a better chance...
The condor is 1140/1150/1280/1290 for 1.95 cred. 130 pt spread.

sd
More...
 
Coach:

I'd like your opinion on the following strategy for freeing up margin:

I have an OCT SPX 1125/1140/1285/1300 IC. In an attempt to free up margin, I had the following trade executed today

BTC OCT SPX 1285 filled at $0.05.

Subsequent to the fill I have placed an order to STC the 1300 option at $0.05. With a little luck someone may actually buy it with over 2 weeks to go.

I'm legging out of these positions, because I have never been successful in closing out a credit spread for $0.10 or less. So, if I can buy the short position back for $0.10 or less, I've achieved my goal and I might even get lucky that someone will buy my remaining long position.

Either way, I have effectively closed this position from a margin point of view on the bear call side.

However the margin is still required because I have a bull put position. Because of the recent sharp decline, it will be difficult to get out of this position for $0.15 or less.

Do you think I'm throwing away money here on commissions (I use OX) and the residual value, because I will have difficulty in getting out of the bull put position probably at least until OpEx week (the assumption is that I want to pay $0.15 or less to close the bull put). Also with puts I have found it generally difficult to pay $0.15 or less on the short position to close it with about 2 weeks or so remaining till opex week. It often takes well into opex week to get that low a value, even though I'm fairly far out OTM.

My goal is to free up margin so I can place November trades.
 
You suck! lol This is like the reverse of front-running. I am actually getting back-running from you guys ha ha.

Quote from skanan:

Coach,

I got 1140x1150 filled for $1.2 :-) just a minute ago.
More...
 
Tough call here. If you are closing the call side and it does not free up any margin and you do not foresee being able to close the put side anytime soon with 2 weeks to expiration, then it might be better to just sit tight. Only time it might make sense is if you foresee a move back higher and you want to take the call profits now and in a few days expect to be able to get out of the puts so that you truly have fre margin and focus on November. Judgement call really but bottom line is no need to close the calls if you do not think you will be able to get out of the puts anytime soon. You could of course close the calls anticipating getting out of the puts soon.

So after using a map to get through the mess I just wrote, the answer is it depends lol.

Phil


Quote from rdemyan:

Coach:

I'd like your opinion on the following strategy for freeing up margin:

I have an OCT SPX 1125/1140/1285/1300 IC. In an attempt to free up margin, I had the following trade executed today

BTC OCT SPX 1285 filled at $0.05.

Subsequent to the fill I have placed an order to STC the 1300 option at $0.05. With a little luck someone may actually buy it with over 2 weeks to go.

I'm legging out of these positions, because I have never been successful in closing out a credit spread for $0.10 or less. So, if I can buy the short position back for $0.10 or less, I've achieved my goal and I might even get lucky that someone will buy my remaining long position.

Either way, I have effectively closed this position from a margin point of view on the bear call side.

However the margin is still required because I have a bull put position. Because of the recent sharp decline, it will be difficult to get out of this position for $0.15 or less.

Do you think I'm throwing away money here on commissions (I use OX) and the residual value, because I will have difficulty in getting out of the bull put position probably at least until OpEx week (the assumption is that I want to pay $0.15 or less to close the bull put). Also with puts I have found it generally difficult to pay $0.15 or less on the short position to close it with about 2 weeks or so remaining till opex week. It often takes well into opex week to get that low a value, even though I'm fairly far out OTM.

My goal is to free up margin so I can place November trades.
More...
 
You must log in or register to reply here.
Back
Top